State court gives North Carolina green light for I-77 toll project

An anti-toll group’s long legal battle to stop the Interstate 77 toll project in North Carolina has been struck down again. A North Carolina Court of Appeals upheld a previous ruling allowing the North Carolina Department of Transportation to proceed with the I-77 HOT Lanes Project.

In a ruling filed on Tuesday, May 2, the panel of judges agreed with a summary judgment awarded to NCDOT, I-77 Mobility Partners and the State of North Carolina. Anti-toll group Widen I-77 sued the state on claims that the toll plans were unconstitutional and violated the Turnpike Statute.

In the original lawsuit, Widen I-77 claimed the public-private partnership statute “grants unto Mobility the absolute authority to set toll rates without any meaningful input or control by the NCDOT or General Assembly.” Citing previous cases, the Court of Appeals disagreed with that claim.

“It is clear that achievement of this stated legislative policy and the fixing, revising, charging, retaining, enforcing, and collecting of tolls require expertise,” the court opined. “It would be impractical to require the General Assembly to provide a ‘detailed agenda covering every conceivable problem which might arise in the implementation of the legislation.’”

The court went on to say that if tolls were priced unreasonably high, motorists will boycott the turnpike. Conversely, if prices are too low, bondholders will object in some manner. Mobility Partners is also required to hold a public hearing on toll rates. Furthermore, the Mobility Partners must report to the Turnpike Authority Boards 30 days before any toll increase.

Widen I-77 also argued the toll serves no public purpose, referring to Article V, Section 2(1) of the North Carolina Constitution provides that states “the power of taxation shall be exercised in a just and equitable manner, for public purposes only, and shall never be surrendered, suspended, or contracted away. Although the constitutional language speaks of the ‘power of taxation,’ the limitation has not been confined to government use of tax revenues.”

However, the court countered by pointing out that the General Assembly acknowledged the state’s road system was becoming increasingly congested and overburdened with traffic. Just because a private company is involved with a toll that not everyone will use does not negate the public purpose of the partnership.

Lastly, the anti-toll group claims the partnership allows Mobility Partners to impose a tax and violates the Due Process Clause of the U.S. Constitution. The appellate court reminded Widen I-77 that the Supreme Court has already determined that tolls are not taxes, explaining that a person uses a toll road as an option.

“The court did not mention the fact that a portion of toll revenues are to be paid to the state as required by the P3 statute, nor did they mention the fact that the contract sets a threshold for revenue sharing so high it constitutes a de facto elimination of revenue sharing thereby violating the P3 statute,” Widen I-77 said in a blog post.

Widen I-77 said that it was deeply disappointed and that it will meet as a group to discuss their next options.

The Alliance for Toll-Free Interstates has stayed away from the issue since the organization is specifically opposed to tolling existing interstates. The I-77 project deals with new capacity lanes. However, ATFI provided Land Line with the following statement:

Tolls are the single most inefficient road-funding mechanism available to states. Every dollar spent building toll facilities, paying administrative costs, sending profit to investors or paying off bondholders is one less dollar put toward improving roads. Even with modern electronic tolling technologies, 12 percent of toll revenue is siphoned away for these purposes, and can be as high as 30 percent of collected revenue. Tolls are bad policy and should be avoided at all costs for transportation funding.